Warns against prolonged uncertainty on Section 232 protections, calls for higher over-quota tariffs, tighter enforcement, and preservation of tariffs for revenue
WASHINGTON, D.C. — The Coalition for a Prosperous America (CPA), representing U.S. domestic steel manufacturers, today expressed significant concerns regarding the newly published U.S.-UK General Terms for a Prosperity Deal and its impact on the American steel industry and its workers. While CPA recognizes certain positive elements of the deal — including a historic pivot towards prioritizing tariff revenue as well as industrial protection — it remains concerned about dangerous precedents being set by sacrificing domestic production while pursuing foreign market access.
Generating uncertainty over future market access concessions in industries protected by Section 232 national security tariffs has an immediate chilling effect on the very investments the Section 232 action was meant to encourage. The newly published General Terms indicate that “the United States will promptly construct a quota at most favored nation (MFN) rates for UK steel and aluminum and certain derivative steel and aluminum products.”
MFN rates on steel and aluminum are effectively zero; and indeed, the UK government is announcing that U.S. tariffs on steel will be “reduced to zero.” While a return to effectively duty-free quota has been signaled, there is no indication as to the volume. What has been conveyed, however, is that more indeterminate quotas should be expected pending new deal announcements. Businesses cannot invest in this environment. If quota is to be made available for imports subject to Section 232 actions, the Administration should do so all at once as soon as possible.
This new uncertainty adds to the fact that the Administration’s choice of 25% offers very limited protective effect for most steel fabricated articles. This is irrefutable from import data on countries that have been subject to the 25% steel duty since 2018. And regrettably, for steel derivative items outside Chapter 73 of the Harmonized Tariff Schedule (HTS), the 25% applies only against what the importer states its foreign vendor alleges to have paid for the foreign steel. There is no producer in America who believes this formula will provide any meaningful protection.
“The 25% over-quota tariff proposed in the agreement is clearly insufficient to protect domestic steel producers,” said Zach Mottl, CPA Chairman. “This tariff level has been shown repeatedly to function merely as a revenue tariff rather than a protective measure. Any genuine attempt to protect national security industries must involve significantly higher over-quota tariffs. Ultimately, this trade framework must ensure our steel industry is safeguarded, not further exposed. We urge the administration to reconsider these critical tariff enforcement mechanisms and quota arrangements before finalizing this agreement. The choice is clear: America’s trade policy must reflect our national interests, not theoretical promises.”
Furthermore, CPA strongly emphasizes the need for CBP-administered quotas rather than so-called “voluntary restraint agreements” (VRAs), as used in the flawed 2019 steel agreement with Canada and Mexico. VRAs effectively outsource America’s trade enforcement to foreign governments, weakening protections and inviting exploitation by foreign producers. Additionally, CPA calls for quota allocations based strictly on specific HTS codes rather than broader classifications, which previously facilitated over-quota shipments and further weakened U.S. trade enforcement.
In a recent op-ed in COMPACT magazine, CPA President Jon Toomey highlighted the fundamental need for a tariff policy that prioritizes domestic production and national security, rather than vague promises of export opportunities.
“Section 232 actions must be prioritized above foreign market access concessions because they remain the most strategic and effective tools we have to reshore critical industries, including steel,” said Jon Toomey, President of CPA. “Unlike reciprocal trade deals that offer vague, uncertain promises of export opportunities, Section 232 measures provide direct, enforceable protection for American producers. Trading away these tariffs in exchange for theoretical market access not only jeopardizes domestic industrial rebuilding but also sends a dangerous signal that our national security priorities are negotiable. The choice should be clear—bet on America.”
Moreover, CPA cautions against relinquishing the foundational 10% tariff designed for revenue purposes. The erosion of this baseline tariff compromises the opportunity to fund domestic tax offsets essential for success of the Administration’s trade platform. If even the modest 10% Universal Tariff is a bargaining chip on the negotiating table, then Congress cannot budget around it, and it will not prove lasting.
CPA’s economic analysis demonstrates that President Trump’s steel tariffs effectively boosted domestic production and safeguarded thousands of American manufacturing jobs. However, recent CPA reports highlight the surge in steel imports from around the world and the critical need to maintain robust tariff enforcement to preserve U.S. industrial capacity.
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